Department of Health
and Human Services

Office of Inspector General -- AUDIT

"City of Chicago's Efforts to Account for and Monitor Sub-Recipients' Use of Bioterrorism Hospital Preparedness
Program Funds - Department of Public Health," (A-05-03-00089)

November 18, 2003

Complete
Text of Report is available in PDF format (304 KB). Copies can also be obtained by contacting the Office of Public
Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

The objectives of this review were to determine whether the Chicago Department of Public Health (Department): (i) properly
recorded, summarized and reported bioterrorism preparedness transactions in accordance with the terms and conditions of
the cooperative agreements and (ii) had controls and procedures to monitor sub-recipient expenditures of HRSA funds. We
determined that the Department generally accounted for program funds in accordance with the terms and conditions of the
cooperative agreement. However, the Department did not segregate expenditures by phase, within phase, or by priority
area. Under new guidelines effective August 31, 2003, grantees will be required to maintain a financial accounting
system capable of tracking expenditures by priority area, critical benchmark, and by funds allocated to hospitals and other
health care entities. We also found that the Department included indirect costs of $62,360, or approximately 14 percent
of the total costs expended. HRSA guidance restricts grantees to indirect costs of 10 percent. We recommended
the Department: (i) implement procedures to comply with the new requirements, and (ii) monitor indirect costs to ensure
that it does not exceed the 10 percent restriction imposed by HRSA. Department officials generally concurred with
our findings and recommendations.